Imports rose 1.6 per cent over September to US$244.6 billion, seasonally-adjusted, the highest since the Commerce Department began publishing the statistic in 1992.
The agency says the shortfall was less than half the $3.4-billion deficit in September. Economists had expected the deficit to widen to USD47.5 billion.
Boosted by a weaker USA dollar, the October trade gap rose 8.6 per cent compared to September, to US$48.7 billion, the highest since January, surpassing analyst expectations for an increase of only 5.6 per cent.
Prices were up 1.5 per cent and volumes increased 1.2 per cent.
Goods and services from China totaled $48.2 billion, while European Union imports amounted to $39.4 billion and Mexico's exports grew to $28.7 billion, which are all record highs. Import volumes fell 3.9 per cent while prices rose 2.4 per cent.
The U.S. Chamber of Commerce said in a May report that they disagree "with the contention that the goods trade deficit is an appropriate gauge of whether a particular set of trade policies - or trade agreements - is delivering benefits to the American people more broadly".
The reason for the deficit is that "Americans are spending more than they produce".
Year-to-date, the goods and services deficit increased $49.1 billion, or 11.9%, from the same period in 2016.
"The widening in the trade deficit in October was driven by a suspiciously large fall in food exports which is likely to be reversed next month.Even accounting for some rebound in the final two months of the quarter, it seems likely that imports will outpace exports in the fourth quarter, meaning net trade will be a small drag on economic growth", said Michael Pearce, an economist at Capital Economics, in a note to clients. USA exports to China increased $2.2 billion to $13.0 billion, primarily driven by soybeans and crude oil. A rising trade gap reduces US economic growth.
Historically speaking, the US imports more good than it exports, but runs a modest trade surplus for services.
The mounting trade deficit comes the administration of President Donald Trump enters the latter stages of fraught negotiations with Mexico and Canada to revamp the North American Free Trade Agreement. Mr. Trump also pulled the USA out of the Trans-Pacific Partnership in early 2017, a pact that would have bound closer together the economies of 12 nations.